20221116IPC to Staff 1-6.pdf

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November 16,2022
VIA ELECTRONIC MAIL
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, ldaho 83714
Re Case No. IPC-E-22-26
ldaho Power Company's Application to Update the Gas Forecast in the
lncremental Cost lntegrated Resource Plan Avoided Cost Model
Dear Ms. Noriyuki:
Aftached for electronic filing is ldaho Power Company's Response to the First
Production Request of the Commission Staff in the above-entitled matter. lf you have any
questions about the attached documents, please do not hesitate to contact me.
MEGAN GOICOECHIA.ALLEN
Corporate Counsel
[e-mail]
MGA:cld
Enclosures
Very truly yours,
WTi0u)^!^fl010,,r
Megan Goicoechea-Allen
MEGAN GOICOECHEA ALLEN (!SB No. 7623)
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
mooicoecheaal len @ idahooower. com
dwalker@ idahopower.com
Attorneys for ldaho Power Company
IDAHO POWER COMPANY'S ANNUAL
COMPLIANCE FILING TO UPDATE THE
LOAD AND GAS FORECASTS IN THE
INCREMENTAL COST INTEGRATED
RESOURCE PLAN AVOIDED COST
MODEL.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. |PC-E-22-26
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Powe/' or 'Company"), and in
response to First Production Request of the Commission Staff ('IPUC or Commission")
dated November 2,2022, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 1
REQUEST FOR PRODUCTION NO. 1: Please confirm whether the years are
misaligned with the load data in the 'October 2021 (aMW)" column in Table No. 1 of the
Compliance Filing. For example, should the tota! load for 2022have been 1 ,924 aMW?
RESPONSE TO REQUEST FOR PRODUCTION NO. 1: Yes, the years were
misaligned such that total load tor 2022 should have been '1,924 MW. This was conected
in the Company's November 11, 2022, enata filing in this docket.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISS]ON STAFF- 2
REQUEST FOR PRODUCTION NO. 2: Please verify whether the years are
misaligned with the load data in "October 2022 (aMV$" column in Table No. 1 of the
Compliance Filing.
RESPONSE TO REQUEST FOR PRODUCTION NO. 2: The data in the .October
2022 (aMW)" column was correct as submitted in the Company's initial October 14,2022,
compliance filing.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.3
REQUEST FOR PRODUCTION NO. 3: The following graph compares the 2021
load forecast and the 2022load forecast.
ldaho Power Annual Load Forecast
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eoooro /Qll LOad ForeCa:t
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Forecast
a. Please provide a breakdown of the 2021 and the 2022loreasts by customer
class (residential, commercia!, and industrial, etc.) in Excelformat.
b. Please explain the method and basis used to determine the 2O22 forecast for
each customer class.
c. The Compliance Filing states: "ldaho Power's most recent load forecast from
September 2022 shows a slight increase in customer loads in the near term,
followed by significant increases beginning tn 2025 through the remainder of the
forecast period..." Please explain why there is only a slight increase in the near
term, but there is a significant increase beginning in 2025 through the remainder
of the forecast period. ln the explanation, please identify the major drivers or
causes for each customer class affecting the change.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.4
:
a. Please refer to the attached Excel spreadsheet for the class load forecasts that
were incorporated in both he 2021 and 2022 annual Ioad and gas filings.
b. For the residential classification, the Company uses a statistically adjusted end-
use (SAE) model to predict future loads. This is a combination of appliance end-
uses by a typical home in the Company's service area that is subject to inclining
or declining unit energy consumption that may or may not change due to state or
federal appliance or building stiandards. That information is sorted into three
categories, heating load, cooling !oad, and other load (or base), and is ran through
a traditional regression framework, hence the "statistically adjusted" portion.
For commercial and industrial, the Company uses a more traditional
econometric, ordinary least squares regression framework with various training
periods. Within this category there are several segments that have unique
variables pertaining to the segment model that is forecasted (e.9. weather or ratio
of farm earnings to gross domestic product (GDP)). The economic variables used
are provided to the Company from a third party macro-e@nomic forecasting firm.
Specialcontracts, utilized when customer's aggregate power requirement exceeds
20 megawafts (MW), are included within the commerclal and industria! segment
based on the forecasted electricity and electricity demand provided to the
Company by the special contract customer. Additionally, customers that have
shown a significant and sufficient binding investment and commitment into the
Company's service area are included as well.
The irrigation sales model relies on a traditional econometric ordinary least
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 5
squares framework similar to that used for the commercial and industria!
classifications. However, a distinction of the inigation sales model from most
commercial and industrial models is the stronger role weather variables such as
temperature and precipitation play.
c. As presented in the November 11, 2022, errata filing made by the Company,
compared to last yea/s filing 2023 has a 2 MW difference-+ffectively no change.
The remainder of the years are subject to new large industrial customers. These
additiona! industrial customers are the primary reason for the difference when
comparing the two load forecasts.
The response to this Request is sponsored by Jordan Prassinos, Load Research
and Forecasting Manager, ldaho Power Company.
]DAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 6
REQUEST FOR PRODUCTION NO. 4: Order No. 33357 requires utilities to
create a queue to track the order in which QF projects have entered negotiations with a
utility to ensure proposed prices (indicative pricing in the !RP Methodology) are more
accurate. Please respond to the following:
a. Please describe the types of projects in ldaho Powe/s queue. Specifically, which
of the following are included:
PURPA projects with contracts in negotiation
Non-PURPA projects with contracts in negotiation
PURPA projects with signed contracts but not yet Commission
approved
Non-PURPA projects with signed contracts but not yet Commission
approved
P U RPA projects with Com m issio n-approved contracts
b. Please describe in detail how ldaho Power manages its queue. Specially, what
criteria are used to determine additions and removals of projects in the queue?
c. Please describe in detail how ldaho Power determines the sequence of projects in
the queue.
d. Please describe in detailhow a QF's position in the queue determines its indicative
pricing.
RESPONSE TO REQUEST FOR PRODUCTION NO. 4: This response pertains
to ldaho Power's process for administering its PURPA pricing queue, which is the
mechanism by which ldaho Power tracks the order in which PURPA qualifying facility
("QF') projects have entered negotiations with the Company for purposes of providing
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 7
indicative pricing to newly proposed QF projects in compliance with Commission
directives in Order Nos. 33357 and 33933. The different types of projects described in
this request are afforded different treatment in the Incremental Cost - Integrated
Resource Plan ("lClRP") avoided cost pricing modelthan they are in administration of the
PURPA pricing queue. See Response to Request No. 5.
a) PURPA projects with contracts in negotiation (bullet point #1 in Request No. 4
subpart a, above) are added to ldaho Power's PURPA project queue when their
ldaho Power tariff Schedule 73 ("Schedule 73') or Oregon tariff Schedule 85
("Schedule 85") application has been fully submitted and accepted as complete by
the Company. Once a PURPA project has an executed contract, the project's queue
status is deemed complete and the project is removed from the pricing queue. This
is the case whether the contract has received Commission approval (bullet point #5)
or not (bullet point #3). Non-PURPA projects (bullet point #2 and #4) are not
included in the PURPA project pricing queue.
b) PURPA projects with contracts in negotiation are added to ldaho Power's PURPA
project pricing queue when their ldaho Power tariff Schedule 73 ("Schedule 73") or
Oregon tariff Schedule 85 ("Schedule 85') application has been fully submifted and
accepted as complete by the Company. Once added, these projects are not
removed from the queue unless or until: (1) they indicate their application is
withdrawn; (2) they execute an energy sales agreement with ldaho Power; or (3)
ldaho Power's queue review team, consisting of representatives from Legal,
Regulatory, Energy Contracts, and Planning, determines that a material change has
occuned (including but not limited to changes to changes to pricing inputs, such as
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 8
Commission approvalof updated load and natural gasforecast inputs to the avoided
cost pricing model). lf a materia! change has occurred, ldaho Power notifies all
queued PURPA projects that their indicative pricing is no Ionger valid and asks the
project to indicate whether it requests updated pricing. lf the project responds in the
affirmative, it remains in the queue and in the avoided cost pricing model and new
indicative prices are developed.
c) As stated above, proposed PURPA projects are arranged sequentially in the queue
in the order that their submitted Schedule 73/Schedule 85 application is deemed
complete.
d) The PURPA pricing queue tracks the order in which proposed PURPA QF projects
have entered negotiations with ldaho Power so that ldaho Power can provide newly
proposed QF projects with estimates of IRP-based avoided cost rates (QFs eligible
for published avoided cost rates under the Sunogate Avoided Resource
methodology also are entered in the queue but are provided indicative pricing from
the appropriate published rate). The indicative avoided cost rate provided to a
proposed QF project above the eligibility cap is based on that QF's place in the
queue and calculated using the ICIRP avoided cost pricing model. This includes both
the energy and capacity components of the price considering the QF's proposed
power and that of all earlier-queued projects; avoided costs for a QF project at the
top of the queue is based on displacement of the highest cost resources on the
system, with each successive QF displacing lower and lower cost resources,
resulting in lower avoided costs. For any project, the value of the energy component
is calculated assuming all projects in an earlier position in the queue are operational
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REOUEST OF THE
COMMISSION STAFF- 9
as of their anticipated on-line date. Similarly, the determination of when a project
first receives capacity payments (contributes to reducing a capacity deficiency)
depends on the impact on capacity deficiency date of all projects in an earlier
position. Both of these would generally result in lower indicative pricing for projects
later in the queue with otherwise identical projects.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.lO
REQUEST FOR PRODUCTION NO. 5: Please confirm that the final IRP-based
avoided cost rates used in a signed contract (not the initial indicative pricing) are
determined based on "projects approved by the Commission" at the time when the !RP-
based contract is signed, which do not include "projects in negotiation" or "projects with a
signed contract but not yet Commission approved.' lf not, please explain.
RESPONSE TO REQUEST FOR PRODUCTION NO. 5: The Commission has
previously determined that limiting updates to incremental pricing based only upon signed
contracts yielded inaccurate avoided costs. Order No. 33357 at28. As a result, in Order
No. 33357, the Commission eliminated the "signed contract'requirement and specifically
"allow[ed] utilities to update their incremental pricing for QFs in their PURPA queue,"
which it concluded would help improve the accuracy of proposed prices and the
predictability of the process. Order No. 33357 at28. The Commission later reaffirmed the
reasoning underlying this determination:
The Commission's adoption of a queueing process for QF projects in Order
No. 33357 was intended to allow incremental pricing under the IRP method
to reflect the actual impacts of each project. Order No. 33357 at28. With its
adoption of the queueing process, the Commission eliminated the
requirement from Order No. 32697 that utilities include only signed
contracts in their IRP method avoided cost calculations. /d. We continue to
find the queueing process a reasonable approach in keeping avoided cost
rates accurate. We now clarifu that under the IRP method of calculating
avoided cost rates, consistent with Order No. 33357, utilities may continue
to use a queue to track the order in which QF projects have entered
negotiations with the utility and to consider the queue in the calculation of
incrementa! pricing.
Order No. 33933 at 2. As a result, ldaho Power does not update indicative pricing
between the time it is first provided and the time of contract execution unless a material
change has occurred, as described in the Company's Response to Request for
Production No. 4, and Idaho Power notifies the project that the previously-provided
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 11
indicative pricing is no Ionger valid. Absent a material change as described in that
response, ldaho Power is not aware of any basis to revise PURPA indicative pricing prior
to contract execution.
While non-PURPA projects are not included in the PURPA queue, in order to be
consistent with the Commission's determinations referenced above to properly update
incrementa! pricing for QFs in the queue, they are included in the ICIRP avoided cost
pricing model if they have entered into a signed power purchase agreement ("PPA") with
ldaho Power. This was confirmed by the Commission in Case No. IPC-E-19-31 where
the inclusion of the signed, but not yet approved, Jackpot Solar PPA was included in the
October 15 pricing update. lncluding non-PURPA PPAs once they are signed is
consistent with the practice of including PURPA projects once they have a completed
ldaho Schedule 73lOregon Schedule 85 application. ln both cases, ldaho Power has an
obligation to purchase pending the Commission's approval of the PPA. lf a non-PURPA
PPA is ultimately terminated, whether due to lack of Commission approval or some other
reason, it would be removed from the avoided cost pricing model. Depending on the size
and scheduled operation date of the projectwith the terminated PPA, this could constitute
a "material change" as described in the Company's Response No. 4 and the process
described in that Response would occur.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning and Coordination Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 12
REQUEST FOR PRODUCTION NO. 6: The Compliance Filing states: "ldaho
Power also evaluated Loss of Load Probability ("LOLP') data from lhe 2021 IRP's
Preferred Portfolio..." Please respond to the following:
a. Please provide the LOLP data from the 2021 IRP's Preferred Portfolio. (Please
use the format of Table 3 of ldaho Power's Compliance Filing in Case No. IPC-E-
20-02.)
b. Please explain why the LOLP data from the 21 IRP's Preferred Portfolio, instead
of a LOLP data based on actual resources in the Company's system, is a
reasonable benchmark to determine Peak Hours and Premium Peak Hours.
RESPONSE TO REQUEST FOR PRODUCTION NO. 6: For clarification, ldaho
Power's Annua! Compliance Filing only reviewed the 2023Preferred Portfolio hourly Loss
of Load Probability ('LOLP") results in order to align with the Peak and Premium Peak
Hour analysis refresh for 2023; all other years in the Preferred Portfolio planning horizon
were not used for this specific case.
a. ldaho Power used four test years of historica! data for the 2021 lntegrated
Resource Plan ("lRP") Loss of Load Expectation ("LOLE')-related calculations.
The test years were used to maintain the relationship between weather, load, and
variable energy resource output. Using the requested 24X12 matrix of average
LOLPs for any further calculations is not advisable because the modeling of limited
energy resources in this way, such as demand response, which can only be
operated under certain conditions, is not accurate. Averaging the LOLPs before
calculating the LOLE would skew the data and provide enoneous results. Because
of this, ldaho Power has provided the following datasets in Excel format for year
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 13
2023 of the 2021 IRP Prefened Portfolio:
o The 8,760x1 LOLPs
o The 24x12 matrix with average LOLPs excluding weekends and holidays
(fhese resu/fs have been provided only because they were requested; they
should not be used for any relating calculations).
The attached Excel spreadsheet with the Preferred Portfolio LOLP results for each
test year is aftached. The test years include annua! data for 2023, with each case
having 8,760x1 results and the 24x12 matrix results. For example, if you wished
to find the 8,760x1 hourly LOLP results for test year 1 is on the tab named
BASE_B2H 2023_TY1_Y. !n this example "TY1" represents the selected test
year, and "Y' represents the 8,760x1 LOLP results (the tabs with "M' instead of
"Y" represent the 24x12 matrix results).
b. As stated at the beginning of this response, only the 2023 LOLP data from the
2021 IRP Preferred Portfolio was used in this analysis. ldaho Power chose to use
the 2023 LOLP data from the 2021 IRP Preferred Portfolio to support the
determination of the Company's Peak and Premium Peak Hours to align with the
analysis refresh period and because the resource additions and load changes for
2023 are better known than the years outside of the Action Plan window.
The response to this Request is sponsored by Shelby McNeilly, Engineer l, ldaho
Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 14
Respectfi.rlly submitted this 1 6h day Novemb er 2022
4rry|rliotul-fillmr
MEGAN GOICOECHEA ALLEN
Attomey for ldaho Poruer Company
IDAHO POVVER COMPANYS RESPONSE TO THE FIRST PRODUCTION RESUEST OF THE
COMMISSION STAFF.15
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 16th day of November 2022, I served a true and
correct copy of ldaho Power Company's Response to First Production Request of the
Commission Staff to ldaho Power Company upon the following named parties by the
method indicated below, and addressed to the following:
Commission Staff
Michae! Duval
Deputy Attomey General
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No.8,
Suite 201-A(83714)
PO Box 83720
Boise, lD 83720-0074
_Hand Delivered
_U.S. Mai!
_Ovemight Mail
_FAX
FTP SiteX Emai!:michae![e-mail]
Christy Davenport, Legal Administrative
Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF- 16